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US Job Growth: Who Gets the Credit?

The private sector added 253,000 jobs in November. The 0.23% increase from October sounds unimpressive, but it was in fact the best October-to-November increase in six years. The percent changes in August, September, and October were about average or better than average.

One more statistic -- the 7.3% increase in private sector employment over the 35 months of rise is steeper than the 2003-07 rise through a similar time period. The increases are not astounding, but they certainly are suggestive of more recovery in the U.S. as we end 2012 and move into 2013.

The Federal Reserve Board has stated that they have made job creation a mandate over inflation control. It may be tempting to give them the credit for the good November jobs number.There could be some validity to their taking some credit for the good news. They have provided a lot of liquidity to banks, and banks are making commercial and industrial loans at 12.7% higher volume than this time last year.

The only problem is that the bank liquidity and willingness to make loans does not neatly equate to the business decision to add labor. Businesses add labor because of demand for products or services. The market is working, and the result is increased employment.